What the hell is Insourcing anyway?
Depending on the research you read approximately 65% of the work done in American companies is project based. The bad news is that most of these projects Fail. This is an indisputable fact. Many studies have been conducted over the past 10 years and they show with unanimity that the following three facts are true:
• American projects are more likely to be unsuccessful than successful
• Only about 1 out of 5 projects is likely to bring full satisfaction
• The larger the project the more likely the failure
• 40% of new IS development projects are cancelled before completion at an estimated cost of $81 Billion annually
• 33% of IS projects are “challenged” by cost/time overruns or changes in scope at an estimated cost of $59 Billion annually
• Failed and Challenged projects cost US companies and governments an estimated $145 billion annually
Executives and decision makers in American companies have been faced with ghastly budget and schedule overruns of projects for years. Estimates indicate that anywhere from $81 to $140 billion annually is lost as a result of poor project execution. Given this, is there any wonder American executives have been searching for a solution?
Unfortunately, the solution du jour – off-shoring – has proven to be no better than the status quo. The majority of off-shore projects experience cost and schedule overruns and the quality of work product being produced is sub par.
So what’s the solution? Is there a way for American companies to solve the problems inherent in modern project based work? And is there a way to solve these problems and get work and jobs back inside American companies?
The answer to both questions is yes and the solution is insourcing. Insourcing is more than just a catchy title. Insourcing is a new way of approaching the work of projects. It involves changing the fundamental paradigm of managing project based work. Insourcing is about changing the way we think about the work we do and how we do it and, as a result, increasing performance and efficiency.
Insourcing isn’t necessarily the antithesis of Outsourcing but it is a concept that if embraced can stem the unnecessary flow of jobs out of America and can help stop the hemorrhaging of money from companies coffers and shareholders pockets.
